OTTAWA - Living in Canada got a lot more expensive last month as the accelerating price of gasoline and the first real emergence of food inflation pushed the rate of increase in Canada's consumer price index over three per cent for the first time in three years.

Statistics Canada said Wednesday the country's annual inflation rate jumped to 3.1 per cent in June from 2.2 per cent the previous month, the biggest one-month leap since September 2005.

As was the case more than three years ago when hurricanes Katrina and Rita caused a spike in oil prices, it was energy costs that fuelled inflation in June.

The cost of filling up at gasoline stations rose sharply by 26.9 per cent from a year earlier, adding to the previous month's 15 per cent increase.

If not for gasoline, Canada's annual inflation rate would have stood at a tepid 1.8 per cent in June, the agency said.

As well, fuel oil and other fuels rose 49.3 per cent, the same pace as in May.

The core inflation rate, which excludes volatile items such as energy and fresh fruit and vegetables, remained steady at 1.5 per cent in June.

But as has been predicted for several months, food price inflation made an appearance, with store-bought food rising three per cent on an annual basis.

The chief culprit in the rise in food prices continued to be baked goods, up 12.3 per cent, but there also were price hikes for other items such as lettuce, milk and butter. Food inflation stood at 1.9 per cent in May.

Other items with significant price increases in June included mortgage costs, up nine per cent from a year earlier, home maintenance costs, up 3.2 per cent, and motor vehicle insurance, up 5.3 per cent.

The cost of flying rose by 14.3 per cent, the largest increase since May 2002, as airlines passed on the higher cost of fuel. Transatlantic flights posted the sharpest increase.

Not all things were more expensive in June, however.

The price of purchasing or leasing an automobile continued to fall, down 8.4 per cent from June 2007. As well, computer equipment and supplies were 13.2 per cent less expensive in June on an annual basis.

Regionally, inflation was highest in Prince Edward Island (4.7 per cent) and Alberta (4.4 per cent), mainly due to the higher cost of energy.

Inflation was lowest in New Brunswick (2.1 per cent) and Manitoba (2.4 per cent).

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June inflation rates for provinces from Statistics Canada

THE CANADIAN PRESS

OTTAWA - The annual inflation rate was 3.1 per cent in June, says Statistics Canada. Here's what happened in the provinces and territories. (Previous month in brackets):

-Newfoundland and Labrador 3.1 (2.8)

-Prince Edward Island 4.7 (4.1)

-Nova Scotia 4.2 (3.5)

-New Brunswick 2.1 (2.1)

-Quebec 3.1 (2.3)

-Ontario 2.8 (1.8)

-Manitoba 2.4 (1.6)

-Saskatchewan 3.4 (3.2)

-Alberta 4.4 (3.7)

-British Columbia 3.0 (2.1)

-Whitehorse, Yukon 4.5 (3.7)

-Yellowknife, N.W.T. 4.5 (4.0)

-Iqaluit, Nunavut 2.3 (1.7)

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June inflation rate by cities

THE CANADIAN PRESS

OTTAWA - The annual inflation rate was 3.1 per cent in June, says Statistics Canada. The agency also released rates for major cities, but cautioned that figures may fluctuate widely because they are based on small statistical samples (Previous month in brackets):

-St. John's, N.L., 3.1 (2.8)

-Charlottetown-Summerside, 4.7 (4.1)

-Halifax, 3.9 (3.3)

-Saint John, N.B., 2.1 (2.3)

-Quebec, 3.0 (2.3)

-Montreal 3.0 (2.3)

-Ottawa 2.6 (1.7)

-Toronto 2.8 (1.9)

-Thunder Bay, Ont., 2.7 (1.7)

-Winnipeg, 2.6 (1.8)

-Regina 3.5 (3.0)

-Saskatoon 4.2 (4.6)

-Edmonton 4.3 (4.1)

-Calgary 4.5 (4.0)

-Vancouver 3.1 (2.4)

-Victoria 2.8 (1.9)

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